B-178494(1), JUN 18, 1974

B-178494(1): Jun 18, 1974

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

DETERMINATION OF NONRESPONSIVENESS BASED ON CONSIDERATION OF UNMARKED PORTIONS OF LITERATURE WHICH SHOWED THAT EQUIPMENT DID NOT CONFORM TO SPECIFICATIONS WAS PROPER SINCE DATA RELATED TO MODEL OFFERED AND BIDDER'S INTENTION WITH RESPECT TO DATA WAS. WHERE IFB STATED DESIRED DELIVERY DATE FOR MAIN ITEM BUT WAS SILENT AS TO MAXIMUM ACCEPTABLE DELIVERY AND REQUIRED DELIVERY OF ANCILLARY ITEMS WITHIN STATED NUMBER OF DAYS AFTER OBTAINING VARIOUS APPROVALS OR CONTRACT AWARD. FIRM DELIVERY DATE CANNOT BE DETERMINED SINCE DELIVERY DEPENDS ON WHEN AWARD IS MADE AND PRIOR DELIVERY OF ANCILLARY ITEMS IS NOT INCONSISTENT WITH DELIVERY OF MAIN ITEM IN 270 DAYS. 3. COVER LETTER TRANSMITTING BID WHICH DISCUSSED LITERATURE SUBMITTED AND CONTAINED STATEMENT THAT "ALL EQUIPMENT AND TESTS WILL BE COMPLETE TO SPECIFICATIONS" IN EFFECT.

B-178494(1), JUN 18, 1974

1. WHERE IFB REQUIRED SUBMISSION OF DESCRIPTIVE LITERATURE "MARKED UP AS NECESSARY" TO SHOW ARRANGEMENT AND OVERALL DIMENSIONS OF DIESEL ENGINES AND RELATED EQUIPMENT, AND BIDDER SUBMITTED FOUR PREPRINTED DATA SHEETS, ONLY ONE OF WHICH CONTAINED ANY HANDWRITTEN MARKS, DETERMINATION OF NONRESPONSIVENESS BASED ON CONSIDERATION OF UNMARKED PORTIONS OF LITERATURE WHICH SHOWED THAT EQUIPMENT DID NOT CONFORM TO SPECIFICATIONS WAS PROPER SINCE DATA RELATED TO MODEL OFFERED AND BIDDER'S INTENTION WITH RESPECT TO DATA WAS, AT BEST, AMBIGUOUS. 2. WHERE IFB STATED DESIRED DELIVERY DATE FOR MAIN ITEM BUT WAS SILENT AS TO MAXIMUM ACCEPTABLE DELIVERY AND REQUIRED DELIVERY OF ANCILLARY ITEMS WITHIN STATED NUMBER OF DAYS AFTER OBTAINING VARIOUS APPROVALS OR CONTRACT AWARD, REQUIREMENT FOR DELIVERY OF ONE ANCILLARY ITEM WITHIN 100 DAYS AFTER AWARD DOES NOT SET MAXIMUM ACCEPTABLE DELIVERY AND THEREBY RENDER BID OFFERING DELIVERY OF MAIN ITEM IN 270 DAYS NONRESPONSIVE. FIRM DELIVERY DATE CANNOT BE DETERMINED SINCE DELIVERY DEPENDS ON WHEN AWARD IS MADE AND PRIOR DELIVERY OF ANCILLARY ITEMS IS NOT INCONSISTENT WITH DELIVERY OF MAIN ITEM IN 270 DAYS. 3. WHILE SUBMISSION OF DESCRIPTIVE LITERATURE AS PART OF BID WHICH CONTAINS PREPRINTED LEGEND MAKING SPECIFICATIONS AND MATERIALS SUBJECT TO CHANGE WITHOUT NOTICE GENERALLY RENDERS BID NONRESPONSIVE, COVER LETTER TRANSMITTING BID WHICH DISCUSSED LITERATURE SUBMITTED AND CONTAINED STATEMENT THAT "ALL EQUIPMENT AND TESTS WILL BE COMPLETE TO SPECIFICATIONS" IN EFFECT, NEGATED PREPRINTED LEGEND AND THEREFORE BID COULD PROPERLY BE DETERMINED TO BE RESPONSIVE. 4. SINCE COAST GUARD HAS NO FORMAL POLICY EVIDENCING ITS GENERAL PRACTICE OF FOLLOWING FPR AND DOTPR REGULATIONS, AND RELYING ON ASPR WHEN A PARTICULAR SITUATION IS NOT COVERED, GAO RECOMMENDS THAT SECRETARY OF TRANSPORTATION REVIEW APPLICABILITY OF EXISTING REGULATIONS AND PROMULGATE APPROPRIATE GUIDELINES TO ENSURE FUTURE CONSISTENCY. REVIEW SHOULD TAKE INTO CONSIDERATION COAST GUARD'S UNIQUE STATUS AS INDEPENDENT AGENCY WITHIN DOT IN PEACETIME BUT PART OF NAVY UPON DECLARATION OF WAR OR WHEN PRESIDENT DIRECTS AND CONGRESSIONAL INTENT THAT COAST GUARD'S PROCUREMENT PROCEDURES BE CLOSELY ATTUNED TO THOSE OF DOD. 5. MAIN PROPULSION DIESEL ENGINES ARE COMMERCIALLY AVAILABLE "OFF THE SHELF" ITEMS, AND USE OF MULTI-YEAR METHOD TO PROCURE THEM WAS IMPROPER IN ABSENCE OF AGENCY DETERMINATIONS REGARDING MARKET IMPACT AND POTENTIAL COST SAVINGS TO GOVERNMENT AS REQUIRED BY DOTPR 12 1.5503(E). ALSO, IFB FAILED TO INCLUDE PROVISION REQUIRING UNIT PRICE OF EACH ITEM IN MULTIYEAR PROCUREMENT TO BE SAME FOR ALL PROGRAM YEARS AS REQUIRED BY DOTPR 12- 1.5505-4. ACCORDINGLY, GAO RECOMMENDS TERMINATION OF UNPERFORMED PORTION OF CONTRACT. 6. CONTENTIONS THAT REQUIREMENT IN IFB FOR DESCRIPTIVE LITERATURE DID NOT COMPLY WITH FPR 1-2.202-5 AND THAT DELIVERY SCHEDULE IN IFB WAS VAGUE AND MISLEADING WERE NOT FILED PRIOR TO BID OPENING AND ARE REJECTED AS UNTIMELY SINCE THEY ALLEGE DEFECTS IN SOLICITATION THAT SHOULD HAVE BEEN APPARENT PRIOR TO BID OPENING. CONTENTION THAT CONTRACTING OFFICER IMPROPERLY DENIED PROTESTER'S REQUEST FOR EXTENSION OF TIME TO SUBMIT BID WAS NOT FILED WITHIN 5 DAYS AFTER PROTESTER LEARNED OF DENIAL AND IS ALSO REJECTED AS UNTIMELY. 4 CFR 20.2(A).

TO WAUKESHA MOTOR COMPANY:

ON JANUARY 18, 1973, THE UNITED STATES COAST GUARD, DEPARTMENT OF TRANSPORTATION (DOT), ISSUED INVITATION FOR BIDS (IFB) NO. BH-93323 2002-0 FOR SPECIFIED QUANTITIES OF MAIN PROPULSION DIESEL ENGINES, REVERSE REDUCTION GEARS, CONTROLS, AND OTHER AUXILIARY EQUIPMENT FOR USE ON COAST GUARD VESSELS. BIDS WERE REQUESTED FOR A SINGLE-YEAR CONTRACT AND A MULTI -YEAR CONTRACT WITH THE COAST GUARD RESERVING THE RIGHT TO MAKE AWARD ON EITHER BASIS.

THE IFB WAS INITIALLY SENT TO 13 PROSPECTIVE BIDDERS. WAUKESHA MOTOR COMPANY (WAUKESHA) WAS NOT ON THE INITIAL LIST, BUT SUBSEQUENTLY OBTAINED A COPY OF THE SOLICITATION. BIDS WERE OPENED ON FEBRUARY 22, 1973. THE ONLY TWO BIDDERS WERE WAUKESHA AND ATLANTIC ENGINE POWER, INC. (ATLANTIC), ONE OF THE COMPANIES ON THE INITIAL LIST. WAUKESHA'S BID WAS LOW BUT WAS DETERMINED TO BE NONRESPONSIVE FOR FAILURE TO MEET SPECIFICATIONS, AND THE CONTRACT WAS AWARDED TO ATLANTIC UNDER THE MULTI-YEAR OPTION ON MARCH 30, 1973. WAUKESHA PROTESTS THE REJECTION OF ITS BID AND THE AWARD OF THE CONTRACT TO ATLANTIC.

FIRST, WAUKESHA CONTENDS THAT THE CONTRACTING OFFICER FAILED TO OBTAIN COMPETITIVE BIDS FROM A SUFFICIENT NUMBER OF QUALIFIED SUPPLY SOURCES TO ASSURE FULL AND FREE COMPETITION. IT CLAIMS THAT AT LEAST FOUR OF THE 13 PROSPECTIVE BIDDERS WHO WERE MAILED COPIES OF THE IFB DO NOT MAKE ENGINES SMALL ENOUGH TO MEET THE COAST GUARD SPECIFICATIONS, AND THAT THE AWARDING OF THE CONTRACT TO ATLANTIC, THE ONLY COMPANY FROM THE 13 SOLICITED BY MAIL TO SUBMIT A BID, INDICATES THAT THE GOVERNMENT HAD A PREDETERMINED CUSTOMER. THE PROTESTER ALSO URGES THAT THE REFUSAL OF THE CONTRACTING OFFICER TO GRANT AN EXTENSION OF THE BIDDING PERIOD, WHICH IT REQUESTED UPON LEARNING OF THE IFB APPROXIMATELY ONE WEEK AFTER IT WAS ISSUED, WAS IMPROPER AND UNREASONABLE AND REVEALS AN INTENT TO LIMIT OR ELIMINATE COMPETITION.

FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.203-1 REQUIRES MAILING OR DELIVERY OF INVITATIONS FOR BIDS "TO A SUFFICIENT NUMBER OF PROSPECTIVE BIDDERS SO AS TO ELICIT ADEQUATE COMPETITION." THE NUMBER OF BIDDERS SOLICITED, AS WELL AS THE MEANS OF PUBLICITY, ARE WITHIN THE DISCRETION OF THE CONTRACTING OFFICER AND HIS DETERMINATION IS SUBJECT TO REVIEW ONLY FOR AN ABUSE OF THAT DISCRETION. SEE 49 COMP. GEN. 707 (1970); B 155319, NOVEMBER 20, 1964. SO LONG AS ADEQUATE COMPETITION HAS BEEN ACHIEVED, FAILURE TO SOLICIT A PARTICULAR BIDDER IS NOT A BASIS FOR CANCELING THE INVITATION OR QUESTIONING AN OTHERWISE PROPER AWARD ABSENT A SHOWING OF DELIBERATE INTENT TO EXCLUDE THAT BIDDER. B 178967, NOVEMBER 5, 1973. HERE, THE FACT THAT SOME OF THE MANUFACTURERS ON THE STANDARD MAILING LIST DO NOT MAKE THE REQUIRED PRODUCT OR THAT SOME OF THOSE QUALIFIED TO BID FAILED TO DO SO IS NOT SUFFICIENT TO ESTABLISH AN ABUSE OF THE CONTRACTING OFFICER'S DISCRETION. FURTHER, THE IFB WAS PROPERLY ADVERTISED IN COMMERCE BUSINESS DAILY ON JANUARY 29, 1973, AS REQUIRED BY FPR 1-2.203-4, AND IT WAS APPARENTLY THIS NOTICE WHICH ATTRACTED THE ATTENTION OF WAUKESHA AND COULD HAVE ATTRACTED OTHERS.

THE CONTENTION OF IMPROPRIETY WITH REGARD TO THE DENIAL OF WAUKESHA'S REQUEST FOR AN EXTENSION OF TIME TO SUBMIT A BID WAS ADVANCED FOR THE FIRST TIME IN THE PROTESTER'S LETTER OF JULY 24, 1973, SUBMITTED IN RESPONSE TO THE COAST GUARD'S ADMINISTRATIVE REPORT. SECTION 20.2(A) OF OUR BID PROTEST PROCEDURES AND STANDARDS, 4 CFR SECS 20.1-12, PROVIDES THAT PROTESTS OTHER THAN THOSE ALLEGING DEFECTS IN A SOLICITATION "*** SHALL BE FILED NOT LATER THAN 5 DAYS AFTER THE BASIS FOR PROTEST IS KNOWN OR SHOULD HAVE BEEN KNOWN, WHICHEVER IS EARLIER ***." ACCORDINGLY, THIS CONTENTION MUST BE REJECTED AS UNTIMELY.

WAUKESHA'S NEXT CONTENTION IS THAT THE REJECTION OF ITS BID AS NONRESPONSIVE WAS IMPROPER. THE CONTRACTING OFFICER'S DETERMINATION WAS BASED ON A REVIEW OF DATA SHEETS AND DRAWINGS SUBMITTED BY WAUKESHA WITH ITS BID. THE LITERATURE WAS SUBMITTED IN RESPONSE TO PARAGRAPH 12 OF SPECIFICATION GENE 39-72, WHICH PROVIDES, IN PART, AS FOLLOWS:

"12. BID INFORMATION - IN ADDITION TO THE BID FORM, BIDDERS SHALL SUBMIT IN TRIPLICATE TYPE PLANS, SKETCHES, OR CATALOG SHEETS MARKED UP AS NECESSARY SHOWING THE ARRANGEMENT AND OVERALL DIMENSIONS OF THE EQUIPMENT BEING OFFERED, INCLUDING ACCESSORIES AND ANCILLARY EQUIPMENT. IN ADDITION ALL DATA BELOW SHALL BE FILLED IN. BIDS WHICH FAIL TO INCLUDE THIS INFORMATION WILL BE CONSIDERED NON-RESPONSIVE.

GENERAL DATA

ENGINE MAKE MODE NUMBER OF CYLINDERS

STROKE/CYCLE BORE STROKE

CUBIC INCH DISPLACEMENT "

WAUKESHA INDICATED THAT IT WAS BIDDING ON ITS MODEL L1616DSIM. EXAMINATION OF THE ACCOMPANYING LITERATURE LED THE CONTRACTING OFFICER TO THE CONCLUSION THAT MODEL "L1616DSIM" FAILED TO CONFORM TO THE SPECIFICATION IN TWO RESPECTS: (1) INSUFFICIENT MAXIMUM PERMISSIBLE EXHAUST SYSTEM BACK PRESSURE: AND (2) THE FAILURE OF THE AIR STARTER OFFERED TO CONFORM TO THE STARTING AIR PRESSURE. IN ADDITION, WAUKESHA FAILED TO SUBMIT INFORMATION AS TO THE "OVERALL DIMENSIONS" OF THE REDUCTION GEAR, AN ACCESSORY ITEM. THUS, THE CONTRACTING OFFICER COULD NOT DETERMINE WHETHER THE EQUIPMENT WOULD MEET THE DIMENSION LIMITATIONS IMPOSED BY SECTION 6.2 OF SPECIFICATION GENE 39-72.

WAUKESHA CONTENDS, IN CONNECTION WITH THE EXHAUST SYSTEM BACK PRESSURE AND STARTING AIR PRESSURE FIGURES, THAT THE CONTRACTING OFFICER READ THESE FIGURES FROM ITS DATA SHEETS ALTHOUGH IT DID NOT INTEND THAT THESE NUMBERS BE CONSIDERED. IT CLAIMS THAT THE EQUIPMENT OFFERED WILL MEET THE SPECIFICATIONS AND THAT THE FIGURES DID NOT APPLY AND/OR WERE MISREAD. EXAMINATION OF THE BID REVEALS THAT THE FIGURES IN QUESTION CAME FROM FOUR "MARINE ENGINE SPECIFICATION AND DATA" SHEETS NUMBERED 3.55-3.58. ON PAGE 3.56, TWO ITEMS LABELED "AUXILIARY WATER PUMP HOSE CONNECTION O.D." AND "COOLING WATER OUTLET HOSE CONNECTION O.D." ARE CIRCLED AND MARKED "R.W. IN" AND "R.W. OUT" RESPECTIVELY. WAUKESHA CONTENDS THAT ONLY THE CIRCLED MATERIAL SHOULD HAVE BEEN CONSIDERED.

IN 49 COMP. GEN. 851, 852 (1970), WE SAID:

"*** IN OUR VIEW, THE INTENT OF THE BID MUST BE DETERMINED FROM A REASONABLE CONSTRUCTION OF ITS ENTIRE CONTENTS INCLUDING ANY UNSOLICITED LITERATURE. IF THE CIRCUMSTANCES ARE REASONABLY SUSCEPTIBLE OF A CONCLUSION THAT THE LITERATURE WAS INTENDED TO QUALIFY THE BID OR IF INCLUSION OF THE LITERATURE CREATES AN AMBIGUITY AS TO WHAT THE BIDDER INTENDED TO OFFER, THEN THE BID MUST BE REJECTED AS NONRESPONSIVE TO THE INVITATION FOR BIDS ***."

WE CANNOT SAY THAT THE CONTRACTING OFFICER'S USE OF ALL DATA, OR HIS INTERPRETATION THEREOF, WAS UNREASONABLE. THERE ARE FOUR DATA SHEETS OF WHICH ONLY ONE, PAGE 3.56, IS MARKED AT ALL. THEY ALL PROVIDE DATA ON THE MODEL OFFERED. IN ADDITION, THERE IS NO INDICATION ANYWHERE IN THE BID AS TO THE PROPER USE FOR THESE DATA SHEETS IN EVALUATING THE BID. IT IS NOT UNREASONABLE TO CONCLUDE FROM THE PRESENCE OF THE THREE UNMARKED SHEETS THAT ALL FIGURES PRINTED THEREON WERE INTENDED TO BE CONSIDERED. AT THE VERY LEAST, THEIR PRESENCE CREATES AN AMBIGUITY WHICH PRECLUDES US FROM DISTURBING THE CONTRACTING OFFICER'S FINDING THAT THE BID WAS NONRESPONSIVE.

WITH RESPECT TO THE ENGINE DIMENSION DATA, WAUKESHA CONCEDES THAT IT FAILED TO INCLUDE THE DIMENSIONS OF THE REVERSE GEAR. HOWEVER, IT CLAIMS THAT THERE ARE ONLY TWO MARINE REVERSE GEARS WHICH MEET THE SPECIFICATIONS, THAT BOTH HAVE SUBSTANTIALLY IDENTICAL EXTERNAL DIMENSIONS, AND THAT THESE DIMENSIONS ARE WELL KNOWN TO COAST GUARD PROCUREMENT OFFICERS. IT ALSO CLAIMS THAT BULLETIN 5217 ATTACHED TO ITS BID SHOWS THE CONFIGURATION OF THE MARINE REVERSE GEAR AND THE ENGINE, AS WELL AS THE DIMENSIONS OF THE ENGINE. ON THIS BASIS, WAUKESHA ARGUES THAT REJECTION OF ITS BID WAS IMPROPER BECAUSE THE OVERALL DIMENSIONS COULD EASILY BE CALCULATED BY THE CONTRACTING OFFICER. WE NEED NOT DECIDE WHETHER THIS POSITION IS CORRECT IN VIEW OF THE FOLLOWING LEGEND PRINTED UNDER THE DIAGRAM CONTAINED IN BULLETIN 5217: "COMPONENTS AND ACCESSORY LOCATIONS AND DIMENSIONS MAY VARY WITH SERVICE AND INSTALLATION REQUIREMENTS. DIMENSIONS NOT GUARANTEED. DETAILED PRINT AVAILABLE FOR LAYOUT WORK." IN LIGHT OF THIS STATEMENT, THE CONTRACTING OFFICER WAS JUSTIFIED IN REFUSING TO MAKE THE CALCULATION AND IN FINDING THE BID NONRESPONSIVE ON THIS GROUND.

WAUKESHA ALSO ARGUES THAT THE CONTRACTING OFFICER "NEGLECTED TO MAKE REASONABLE INQUIRIES TO PREVENT AN UNFAIR AND UNREASONABLE MISINTERPRETATION" OF ITS BID. IT IS FUNDAMENTAL THAT RESPONSIVENESS IS TO BE DETERMINED AT BID OPENING AND THAT A CONTRACTING OFFICER CANNOT RELY ON INFORMATION SUPPLIED BY A BIDDER AFTER BIDS HAVE BEEN OPENED. SUCH A PRACTICE WOULD ALLOW THE BIDDER AN OPTION TO AFFECT THE RESPONSIVENESS OF HIS BID. SEE 50 COMP. GEN. 8 (1970). THE RESPONSIBILITY LIES CLEARLY WITH THE BIDDER TO "MARK UP AS NECESSARY" ANY LITERATURE HE SUBMITS TO PRECLUDE POSSIBLE MISINTERPRETATION.

THE FINAL CONTENTIONS UNDER CONSIDERATION RELATE TO THE AWARD OF THE CONTRACT TO ATLANTIC. WAUKESHA CLAIMS THAT IT WAS NOT GIVEN A FAIR AND REASONABLE AMOUNT OF TIME TO PROTEST PRIOR TO AWARD. THE RECORD SHOWS THAT THE CONTRACT WAS AWARDED ON MARCH 30, 1973, AND THAT NOTICE OF THE AWARD WAS MAILED TO WAUKESHA ON THE SAME DAY. THERE IS NO REQUIREMENT THAT UNSUCCESSFUL BIDDERS RECEIVE ADVANCE NOTICE OF THE CONTRACT AWARD. FPR 1-2.408(A)(1) REQUIRES ONLY THAT, WHEN THE AWARD IS MADE, PROMPT NOTICE OF REJECTION BE GIVEN TO BIDDERS LOWER THAN THE SUCCESSFUL BIDDER.

IT IS FURTHER CLAIMED THAT THE AWARD TO ATLANTIC WAS IMPROPER BECAUSE ATLANTIC'S PROPOSED DELIVERY DATE FOR THE FIRST PROGRAM YEAR (SCHEDULE A) DID NOT COMPLY WITH THE REQUIREMENTS OF THE IFB. PAGE 12 OF THE IFB CONTAINS THE FOLLOWING PERTINENT DELIVERY PROVISION:

"TIME OF DELIVERY: SCHEDULE 'A' ITEM 1 ONLY

(X) DELIVERY IS DESIRED ON OR BEFORE 1 JULY 1973, VENDOR TO STATE BEST POSSIBLE DELIVERY ON OR AFTER 1 JULY 1973. DELIVERY IS IMPORTANT AND WILL BE CONSIDERED IN THE EVALUATION OF ALL BIDS. IF THE BIDDER IS UNABLE TO MEET THE ABOVE DELIVERY SCHEDULE, HE MAY, WITHOUT PREJUDICE TO THE EVALUATION OF HIS BID, SET FORTH HIS PROPOSED DELIVERY SCHEDULE BELOW; BUT SUCH DELIVERY SCHEDULE MUST NOT EXTEND THE DELIVERY PERIOD BEYOND THE TIME FOR DELIVERY CALLED FOR IN THE FOLLOWING DELIVERY SCHEDULE:

(X) REQUIRED DELIVERY SCHEDULE: ON OR BEFORE ITEM 2-30 DAYS AFTER AWARD, #3-30 DAYS AFTER APPROVAL, #4-60 DAYS AFTER AWARD, #5-30 DAYS AFTER APPROVAL, #6-WITH #4, #7-60 DAYS AFTER NOTICE TO PROCEED.

#8-100 DAYS AFTER AWARD.

BIDS OFFERING DELIVERY OF A QUANTITY UNDER SUCH TERMS OR CONDITIONS THAT DELIVERY WILL NOT CLEARLY FALL WITHIN THE APPLICABLE REQUIRED DELIVERY PERIOD SPECIFIED ABOVE WILL BE CONSIDERED NONRESPONSIVE AND WILL BE REJECTED"

IN RESPONSE TO THIS PROVISION, ATLANTIC MADE THE FOLLOWING ENTRY IN THE SPACE PROVIDED IN THE IFB: "DELIVERY OF ITEM 1, SCHEDULE 'A' WILL BE 210 DAYS AFTER RECEIPT OF AWARD. ALL OTHER ITEMS OF SCHEDULE 'A' AND ALL OTHER SCHEDULES AS REQUIRED." WAUKESHA CONTENDS THAT THE PROVISION CITED ABOVE IMPOSES A MAXIMUM OF 100 DAYS AFTER AWARD FOR A BIDDER'S PROPOSED DELIVERY SCHEDULE, AND THAT THEREFORE ATLANTIC'S BID WAS NONRESPONSIVE. WHILE WE CONCUR WITH THE PROTESTER THAT THE ABOVE DELIVERY PROVISION IS NOT A MODEL OF CLARITY, WE DO NOT VIEW IT AS IMPOSING A 100-DAY MAXIMUM. THE REQUIRED DELIVERY SCHEDULE DOES NOT MENTION ITEM 1. MOREOVER, SINCE THE REQUIRED DELIVERY SCHEDULE FOR ITEMS IDENTIFIED IS CONDITIONED UPON VARIOUS APPROVALS OF CONTRACT AWARD, AND SINCE THE TIME REQUIRED FOR THESE APPROVALS OR AWARD IS INCAPABLE OF PRECISE DETERMINATION AS OF BID OPENING, A FINAL ACCEPTABLE DATE CANNOT BE COMPUTED. IN ADDITION, FROM OUR REVIEW OF THE NATURE OF ITEMS 2 THROUGH 7, WE ARE UNABLE TO SAY THAT PRIOR DELIVERY OF THESE ITEMS IS INCONSISTENT WITH FURNISHING ITEM 1 IN 210 DAYS AFTER RECEIPT OF AWARD.

FINALLY, WAUKESHA CONTENDS THAT PARAGRAPH 12 OF SPECIFICATION GENE 39 72, REQUIRING THE SUBMISSION OF DESCRIPTIVE LITERATURE, DOES NOT COMPLY WITH THE REQUIREMENTS OF FPR 1-2.202-5. IT ALSO MAINTAINS THAT THE DELIVERY SCHEDULE IN THE IFB WAS VAGUE AND MISLEADING. SECTION 20.2(A) OF OUR BID PROTEST PROCEDURES AND STANDARDS REQUIRES THAT PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY FORM OF SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING BE FILED PRIOR TO BID OPENING. SINCE THE DEFECTS ALLEGED SHOULD HAVE BEEN APPARENT TO WAUKESHA PRIOR TO THE SUBMISSION OF ITS BID, THIS PORTION OF THE PROTEST IS UNTIMELY. WE NOTE, HOWEVER, THE CONTRACTING OFFICER'S ADVICE THAT CORRECTIVE ACTION WILL BE TAKEN TO AVOID A RECURRENCE OF THIS SITUATION.

DURING OUR REVIEW OF THIS PROTEST, WE RAISED ON OUR OWN MOTION TWO ADDITIONAL ISSUES. CF. B-176207, JANUARY 24, 1973. THE FIRST QUESTION DEALS WITH THE RESPONSIVENESS OF ATLANTIC'S BID AND THE SECOND WITH THE COAST GUARD'S PROCUREMENT AUTHORITY AND ITS USE OF MULTI-YEAR PROCUREMENT TO ACQUIRE THE REQUIRED SUPPLIES. ATLANTIC'S BID INCLUDED CATERPILLAR TRACTOR CO., DATA SHEET D353 (COVERING THE ENGINE IT PROPOSED TO FURNISH) WHICH CONTAINS THE STATEMENT: "MATERIALS AND SPECIFICATIONS SUBJECT TO CHANGE WITHOUT NOTICE." WE HAVE HELD THAT SUCH LEGENDS IN DESCRIPTIVE LITERATURE CONSTITUTE A MATERIAL DEVIATION REQUIRING BID REJECTION. SEE 53 COMP. GEN. (B-178954, JANUARY 28, 1974), AND CASES CITED THEREIN. UPON FURTHER CONSIDERATION OF THE MATTER, WE AGREE WITH THE COAST GUARD'S VIEW THAT THE COVER LETTER TRANSMITTING ATLANTIC'S BID, IN EFFECT, NEGATES THE LEGEND. THIS COVER LETTER DISCUSSES THE DESCRIPTIVE LITERATURE SUBMITTED WITH THE BID AND CONCLUDES WITH THE STATEMENT: "ALL EQUIPMENT AND TESTS WILL BE COMPLETE TO SPECIFICATION." PARENTHETICALLY, WE NOTE THAT WAUKESHA'S BULLETIN 5217 RESERVED THE RIGHT TO CHANGE OR MODIFY THE SPECIFICATIONS WITHOUT NOTICE, AND NOTHING IN ITS BID CURES THIS DEVIATION.

DURING A MEETING WITH REPRESENTATIVES OF DOT AND THE COAST GUARD, WE WERE ADVISED THAT ALTHOUGH COAST GUARD DERIVES ITS BASIC PROCUREMENT AUTHORITY FROM THE ARMED SERVICES PROCUREMENT ACT, SEE 10 U.S.C. 2303(A)(4), IT RELIES PRIMARILY ON THE FPR AND DOT PROCUREMENT REGULATIONS. WHERE, HOWEVER, FPR DOES NOT COVER A PARTICULAR SITUATION, THE ARMED SERVICES PROCUREMENT REGULATION IS USED. WE NOTE HERE THAT THE IFB CONTAINS REFERENCES TO BOTH FPR AND THE ARMED SERVICES PROCUREMENT REGULATION.

WE ALSO UNDERSTAND THAT COAST GUARD'S GENERAL PRACTICE IS NOT REFLECTED IN ANY FORMAL POLICY GUIDANCE. IN OUR VIEW, THE ESTABLISHMENT OF A UNIFORM AND READILY DISCERNIBLE REGULATORY STANDARD FOR EFFECTING COAST GUARD PROCUREMENTS IS IN THE INTEREST OF BOTH THE COAST GUARD AND THE COMMERCIAL COMMUNITY WITH WHICH IT DEALS. WE ARE, THEREFORE, RECOMMENDING THAT THE SECRETARY OF TRANSPORTATION REVIEW THE MATTER WITH A VIEW TOWARDS ADOPTING GUIDELINES WHICH WILL GOVERN COAST GUARD PROCUREMENT.

WE THINK THIS REVIEW MUST TAKE INTO CONSIDERATION COAST GUARD'S UNIQUE STATUS. THE COAST GUARD IS IN PEACETIME AN INDEPENDENT AGENCY WITHIN THE DEPARTMENT OF TRANSPORTATION AND SUBJECT TO THE DIRECTION AND CONTROL OF THE SECRETARY OF TRANSPORTATION. HOWEVER, THE COAST GUARD BECOMES A PART OF THE DEPARTMENT OF THE NAVY UPON A DECLARATION OF WAR OR WHEN THE PRESIDENT SO DIRECTS. IN ASSESSING COAST GUARD'S STATUS, WE BELIEVE CONGRESS INTENDED THAT COAST GUARD'S PROCUREMENT PROCEDURES BE CLOSELY ATTUNED TO THOSE OF THE DEPARTMENT OF DEFENSE.

FOR EXAMPLE, THE SENATE COMMITTEE ON ARMED SERVICES EXPLAINED THE INCLUSION OF THE COAST GUARD IN THE ARMED SERVICES PROCUREMENT ACT BY POINTING OUT THAT THE COAST GUARD OPERATES AS PART OF THE NAVY IN WARTIME, AND THAT THEREFORE:

"*** NOT ONLY THEIR OPERATING PROCEDURES SHOULD BE THE SAME BUT EQUIPMENT AND DESIGN SHOULD BE SO STANDARDIZED THAT PARTS AND SUPPLIES ARE INTERCHANGEABLE. S. REP. NO. 571, 80TH CONG., 1ST SESS. 3 (1947)"

IN EXPLAINING THE CONCURRENCE OF THE HOUSE IN THE SENATE AMENDMENT WHICH ADDED THE COAST GUARD, REPRESENTATIVE ANDERSON SAID:

"INCLUSION OF THE COAST GUARD WAS RECOMMENDED BY THE SECRETARY OF THE TREASURY AND IS FELT TO BE LOGICAL IN VIEW OF THE FACT THAT THAT SERVICE IS FACED WITH THE SAME PROCUREMENT PROBLEMS AS THE ARMY, NAVY, AND AIR FORCE; FURTHERMORE, IT BECOMES A PART OF THE NAVY IN WARTIME AND THEREFORE IT IS DESIRABLE TO HAVE ITS EQUIPMENT INTERCHANGEABLE WITH THAT OF THE NAVY." CONGRESSIONAL RECORD FOR FEBRUARY 5, 1948, PAGE 1194.

FURTHER, WE KNOW OF NOTHING IN THE DEPARTMENT OF TRANSPORTATION ACT (PUBLIC LAW 89-670), WHICH TRANSFERRED THE COAST GUARD FROM THE TREASURY DEPARTMENT TO THE NEWLY CREATED DEPARTMENT OF TRANSPORTATION IN 1966, THAT WOULD DIMINISH THE VALIDITY OF THE ABOVE RATIONALE. ON THE CONTRARY, COAST GUARD PERSONNEL STRESSED ITS CONTINUED STATUS AS AN ARMED FORCE IN CONNECTION WITH THE PASSAGE OF PUBLIC LAW 89-670. IN HEARINGS ON H.R. 13200 BEFORE A SUBCOMMITTEE OF THE HOUSE COMMITTEE ON GOVERNMENT OPERATIONS, 89TH CONG., 2D SESS., PT. 1, AT 159 (1966), VICE ADMIRAL SHIELDS, ASSISTANT COMMANDANT, UNITED STATES COAST GUARD, SAID:

"IN THE DRAFTING OF THE BILL NOW BEFORE THIS COMMITTEE, WE STRESSED THE NECESSITY OF CONTINUING THE COAST GUARD'S INTEGRAL STATUS BECAUSE IT IS AN ARMED FORCE, AND IMMEDIATELY BECOMES A PART OF THE NAVY UPON A DECLARATION OF WAR OR WHEN THE PRESIDENT SO DIRECTS."

IN RESPONSE TO A QUESTION FROM CONGRESSMAN BROWN, ADMIRAL SHIELDS CONTINUED: "ONE OF OUR PRIMARY DUTIES IS MILITARY READINESS TO FUNCTION IN TIME OF WAR, SO THAT WE HAVE TO PREPARE OURSELVES IN TIME OF PEACE TO BE ABLE TO TAKE OVER THOSE FUNCTIONS AND SUCH ACTIVITIES AS ANTISUBMARINE WARFARE ***." ID., AT 161.

WITH RESPECT TO THE USE OF MULTI-YEAR PROCUREMENT, SECTIONS 12-1.5500 TO .5514-2 OF THE DOT PROCUREMENT REGULATION (DOTPR) CONTAIN PROCEDURES FOR THE USE OF MULTI-YEAR PROCUREMENT. (THESE PROCEDURES ARE IN ALL MATERIAL RESPECTS IDENTICAL TO THE ASPR COVERAGE OF MULTI-YEAR PROCUREMENT. SEE ASPR 1-322.) IN OUR VIEW, THE COAST GUARD'S USE OF MULTI-YEAR PROCUREMENT FOR OBTAINING THE REQUIRED SUPPLIES WAS IMPROPER.

DOTPR 12-1.5503 PROVIDES IN PART AS FOLLOWS:

"EXCEPT AS PROVIDED IN DOTPR 12-1.5511, THE MULTI-YEAR PROCUREMENT METHOD FOR SUPPLIES SHOULD BE USED WHEN ALL OF THE FOLLOWING CRITERIA ARE PRESENT:

"(E) THE ITEMS BEING PROCURED ARE NOT REGULARLY MANUFACTURED AND OFFERED FOR SALE IN SUBSTANTIAL QUANTITIES IN THE COMMERCIAL MARKET, EXCEPT THAT (A) WHEN QUANTITIES TO BE PROCURED BY THE GOVERNMENT REPRESENT A SUBSTANTIAL PORTION OF THE TOTAL MARKET AND WOULD REQUIRE SPECIAL MANUFACTURING RUNS FOR ALL OR SUBSTANTIALLY ALL OF THE GOVERNMENT'S REQUIREMENTS AND (B) SIGNIFICANT COST SAVINGS WOULD RESULT FROM MULTI-YEAR PROCUREMENT; THE FILE SHALL BE DOCUMENTED AS TO WHY THE EXPECTED SUBSTANTIAL SAVINGS ARE NOT OBTAINABLE UNDER ANNUAL PROCUREMENTS."

DOTPR 12-1.5511(C) PROHIBITS THE USE OF MULTI-YEAR PROCUREMENT "WHEN ANY ONE OF THE CRITERIA SET FORTH IN 12-1.5503 IS NOT PRESENT."

THE MULTI-YEAR CONCEPT WAS DEVELOPED BY THE DEPARTMENT OF DEFENSE AS A MEANS OF SECURING FOR THE GOVERNMENT BENEFITS THAT COULD NOT BE DERIVED BY CONTRACTING SOLELY ON A FISCAL-YEAR BASIS. WHEN WE APPROVED THE CONCEPT IN 43 COMP. GEN. 657 (1964), WE STRESSED THAT IT WOULD BE USED ONLY WHERE COMPETITIVE PROCEDURES ESTABLISH THAT REDUCED UNIT PRICES WOULD RESULT OVER ANNUAL BUYS BY REASON OF THE ELIMINATION OF REPETITIVE, SUBSTANTIAL START-UP COSTS. ID., AT 658. SUCH COST BENEFITS GENERALLY DO NOT EXIST WHERE THE GOVERNMENT IS PURCHASING COMMERCIALLY AVAILABLE "OFF THE SHELF" MERCHANDISE AND THIS LIMITATION IS SPECIFICALLY RECOGNIZED IN THE DOTPR PROVISION CITED ABOVE.

IT IS UNDISPUTED THAT THE ITEMS TO BE PROCURED ARE REGULARLY MANUFACTURED AND THE RECORD CONTAINS NONE OF THE DOCUMENTATION REQUIRED BY DOTPR 12- 1.5503(E) TO SUPPORT AN EXCEPTION. IN THIS CONNECTION, THE CONTRACTING OFFICER STATES THAT THE REQUIREMENT WAS OVERLOOKED.

IN ADDITION, THE IFB FAILED TO INCLUDE "A PROVISION THAT THE UNIT PRICE OF EACH ITEM IN THE MULTI-YEAR REQUIREMENT SHALL BE THE SAME FOR ALL PROGRAM YEARS INCLUDED THEREIN," AS REQUIRED BY DOTPR 12-1.5505-4. WHERE, AS HERE, THE SAME ITEM IS BEING FURNISHED IN ALL PROGRAM YEARS, A REQUIREMENT FOR IDENTICAL UNIT PRICING IS AN ESSENTIAL ELEMENT IN THE MULTI-YEAR PROCUREMENT PROCEDURE. THE CONTRACTING OFFICER ADVISES THAT THIS REQUIREMENT WAS ALSO OVERLOOKED.

IN VIEW OF THE IMPROPER USE OF MULTI-YEAR PROCUREMENT, WE RECOMMEND THAT THE REMAINING PROGRAM YEAR BE TERMINATED AND THE REQUIREMENT RESOLICITED UNDER PROPER TERMS AND CONDITIONS.

FINALLY, WAUKESHA MAINTAINS THAT IT IS ENTITLED TO RECOVER BID PREPARATION COSTS BECAUSE OF THE CONTRACTING OFFICER'S ALLEGEDLY IMPROPER EVALUATION OF ITS BID. ON THE PRESENT RECORD, WE CANNOT SAY THAT THE STANDARD FOR RECOVERY OF BID PREPARATION COSTS ESTABLISHED IN EXCAVATION CONSTRUCTION INC. V. UNITED STATES, NO. 408-71, UNITED STATES COURT OF CLAIMS, DECIDED APRIL 17, 1974; KECO INDUSTRIES, INC. V. UNITED STATES, NO. 173-69, UNITED STATES COURT OF CLAIMS, FEBRUARY 20, 1974; AND CONTINENTAL BUSINESS ENTERPRISES V. UNITED STATES, 452 F.2D 1016 (CT. CL. 1971) HAS BEEN MET.

SINCE THIS DECISION CONTAINS RECOMMENDATIONS FOR CORRECTIVE ACTION TO BE TAKEN, IT IS BEING TRANSMITTED BY LETTERS OF TODAY TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, PUBLIC LAW 91-510, 31 U.S.C. SEC. 1172.